Correlation Between MAVEN WIRELESS and TRAVEL +

Can any of the company-specific risk be diversified away by investing in both MAVEN WIRELESS and TRAVEL + at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MAVEN WIRELESS and TRAVEL + into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAVEN WIRELESS SWEDEN and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on MAVEN WIRELESS and TRAVEL + and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MAVEN WIRELESS with a short position of TRAVEL +. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAVEN WIRELESS and TRAVEL +.

Diversification Opportunities for MAVEN WIRELESS and TRAVEL +

0.04

Correlation Coefficient

MAVEN WIRELESS  TRAVEL +

Significant diversification

The 3 months correlation between MAVEN and TRAVEL is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL and MAVEN WIRELESS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MAVEN WIRELESS SWEDEN are associated (or correlated) with TRAVEL +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of MAVEN WIRELESS i.e., MAVEN WIRELESS and TRAVEL + go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and TRAVEL +

Assuming the 90 days horizon MAVEN WIRELESS SWEDEN is expected to generate 1.95 times more return on investment than TRAVEL +. However, MAVEN WIRELESS is 1.95 times more volatile than TRAVEL LEISURE DL 01. It trades about 0.03 of its potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about -0.05 per unit of risk. If you would invest  84.00  in MAVEN WIRELESS SWEDEN on December 29, 2024 and sell it today you would earn a total of  2.00  from holding MAVEN WIRELESS SWEDEN or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MAVEN WIRELESS SWEDEN  vs.  TRAVEL LEISURE DL 01

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MAVEN WIRELESS SWEDEN are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MAVEN WIRELESS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TRAVEL LEISURE DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRAVEL LEISURE DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TRAVEL + is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MAVEN WIRELESS and TRAVEL +

The main advantage of trading using opposite MAVEN WIRELESS and TRAVEL + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS position performs unexpectedly, TRAVEL + can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in TRAVEL + will offset losses from the drop in TRAVEL +'s long position.

The idea behind MAVEN WIRELESS SWEDEN and TRAVEL LEISURE DL 01 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.